Economy May 29, 2026 08:46 AM

AI-led rally pulls global equity funds back into inflows

Investors returned to equities as AI-linked stocks drove demand, while cautious sentiment lingered over U.S.-Iran ceasefire progress

By Ajmal Hussain

Global equity funds recorded net inflows in the week to May 27 after a prior week of withdrawals, propelled by a rally in AI-related technology shares and a rebound in sentiment. Broader flows showed strong demand for bond funds, continued outflows from Asian and emerging market equities, and weakness in precious metals and money market funds.

AI-led rally pulls global equity funds back into inflows

Key Points

  • Global equity funds saw net inflows of $457.57 million after a prior week of $6.56 billion in outflows - impacts equity markets and asset managers.
  • Technology-led rally, boosted by demand signals for AI chips, was the primary driver of sector inflows; technology and financial sector funds led gains - impacts tech and financial sectors.
  • Global bond funds extended an eight-week inflow streak, taking in $18.15 billion with strong demand for short-term, euro-denominated and corporate bond funds - impacts fixed income markets and credit instruments.

Global investors reversed a week of withdrawals and put fresh money into equity funds in the seven days ending May 27, according to LSEG Lipper, as an upswing in AI-related technology stocks helped restore appetite for risk assets. Net purchases of global equity funds reached $457.57 million, a turnaround from a net outflow of $6.56 billion in the prior week.

MSCI's World Index climbed to a record 1,129.06 on Friday, driven in part by optimism around an extension of the U.S.-Iran ceasefire agreement, subject to final approvals. However, market participants remained selectively cautious, with negotiations between the two countries cited as a factor tempering broader buying.

Technology shares were especially favored following renewed demand signals for AI hardware. Nvidia's recent commentary highlighting strong interest in its AI chips helped focus investor attention on the technology sector.

Regional fund flows were uneven. U.S. equity funds drew net inflows of $1.97 billion, while European equity funds took in $678 million. Asian equity funds recorded net outflows totaling $3.92 billion.

By sector, investors concentrated on thematic and cyclical areas. Sector funds as a group saw net inflows of $5.14 billion, with technology funds accounting for $4.98 billion of that total and financials attracting $1.05 billion.

Fixed income continued to attract sizable demand. Global bond funds extended their positive run to an eighth consecutive week, taking in $18.15 billion overall. Within the bond complex, short-term bond funds led flows with a net $3.67 billion, euro-denominated bond funds drew $3.16 billion and corporate bond funds added $1.4 billion.

Money market funds, by contrast, experienced a reversal after a strong prior week, posting net outflows of $4.46 billion following net inflows of $18.12 billion the week before.

Precious metals funds, including those focused on gold, registered net outflows of $584 million, marking their fourth weekly decline in five weeks.

Emerging market funds displayed further divergence: equity funds in that category suffered net redemptions of $4.45 billion, extending a five-week streak of outflows, while emerging market bond funds attracted net inflows of $1.08 billion. The dataset covered 28,882 funds.


Data source note: All flow figures are reported by LSEG Lipper for the week ending May 27.

Risks

  • Investor caution tied to the U.S.-Iran ceasefire negotiations could limit further equity market gains - affects global equities and risk-sensitive sectors such as technology and financials.
  • Continued outflows from Asian and emerging market equities suggest regional vulnerability and potential pressure on EM asset prices - impacts emerging market equities and related funds.
  • Sustained withdrawals from precious metals and money market funds may indicate shifting liquidity preferences that could amplify volatility if risk sentiment changes - affects safe-haven and short-term cash instruments.

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